Court Approves Sale Of 40% Of Bankrupt Retail Supplier's RCEs To NRG

Bankrupt Supplier Discusses Path Forward For Remaining RCEs, Potential POLR Drop

September 10, 2021

Email This Story
Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The following story is brought free of charge to readers by EC Infosystems, the exclusive EDI provider of EnergyChoiceMatters.com

A bankruptcy court today approved the sale of a significant book of customers of Liberty Power Holdings, LLC (collectively, 'Liberty Power' or the 'Debtors') to NRG Retail, LLC, which had been previously designated as a stalking horse bidder

The book includes about 40% of Liberty Power's residential customer equivalents (RCEs), as further detailed below. While it represents only 40% of Liberty's RCEs, the book being sold to NRG does represent a "substantial" number of Liberty's customer contracts (as noted below, it includes all residential contracts and some C&I contracts)

During a sale hearing, Debtors said that, for the remaining Liberty Power RCEs, Debtors hope to execute a private sale, or potential sales to multiple buyers. Debtors said certain potential buyers did not wish to compete with NRG for the larger book sale, but may have a greater appetite in a separate sale process for discrete RCEs (the remaining RCEs consist of non-residential customers, including larger C&I customers)

However, if such a sale does not materialize, the remaining Liberty Power customers may need to be dropped to providers of last resort (POLR), counsel for Debtors said

As to the book sale to NRG which was approved by the court, the Debtors’ estimate of the total number of RCEs under the Customer Contracts to be sold to NRG, as of August 16, 2021, is 138,602.

Based on the Debtors’ estimate of the total number of RCEs that will be transferred to NRG, the total purchase price for the Debtors’ Customer Contracts under the Stalking Horse Agreement will equal approximately $36,386,951 (the 'Total Purchase Price').

The three groups of Purchased Assets and the allocated portion of the Total Purchase Price for each are as follows:

(i) Texas Residential Contracts - All of the Debtors’ residential customer contracts for customers located in Texas (the 'Texas Residential Contracts') for a purchase price equal to $340 per RCE, which based on the Debtors’ estimated number of RCEs for such Texas Residential Contracts as of August 16, 2021, equals an estimated purchase price (subject to adjustment and reconciliation as set forth in the Stalking Horse Agreement) of $11,934,499;

(ii) East Residential Contracts - All of the Debtors’ residential customer contracts for customers located outside of Texas (the 'East Residential Contracts') for a purchase price equal to $290 per RCE, which based on the Debtors’ estimated number of RCEs for such East Residential Contracts as of August 16, 2021, equals an estimated purchase price (subject to adjustment and reconciliation as set forth in the Stalking Horse Agreement) of $17,109,836; and

(iii) East Commercial Contracts – Certain of the Debtors’ customer contracts with small/medium sized commercial businesses located outside of Texas (defined as those customers with less than 175,000 kwh of annual consumption), which are as set forth in the Stalking Horse Agreement (the 'East Commercial Contracts') for a purchase price equal to $165 per RCE, which based on the Debtors’ estimated number of RCEs for such East Commercial Contracts as of August 16, 2021, equals an estimated purchase price (subject to adjustment and reconciliation as set forth in the Stalking Horse Agreement) of $7,342,616.

NRG will assign the acquired customers to its various retail suppliers as follows:

Texas Residential Contracts:

• Green Mountain Energy Company (100% renewable customers)

• US Retailers LLC (all other Texas residential customers)

East Residential Contracts

• XOOM Energy Maine, LLC (for customers in Maine)

• XOOM Energy Rhode Island, LLC (for customers in Rhode Island)

• Reliant Energy Northeast LLC (for all other East Residential Contracts)

East Commercial Contracts

• XOOM Energy Maine, LLC (for customers in Maine)

• XOOM Energy Rhode Island, LLC (for customers in Rhode Island)

• Reliant Energy Northeast LLC (for all other East Commercial Contracts)

The customer book sale to NRG does not include the sale of the Debtors’ accounts receivable or the Debtors’ power and related hedge agreements, which the Debtors will collect and realize upon independently of the within sale.

At the time of publication, a bankruptcy court took under advisement a largely pecuniary claim raised by the Illinois Attorney General against Debtors; however, the resolution of such question does not impact the sale of the above-described book to NRG which was approved.

While the claim from the Illinois AG relates solely to residential customers, part of the relief sought by the Illinois AG (also in a parallel state court proceeding) is the revocation of Liberty Power's operating authority, which could potentially affect the remaining commercial customers in Illinois (the residential customers are no longer owned by Liberty due to the approved book sale to NRG). However, as was the case with the NRG book sale, the bankruptcy court could approve the sale of any remaining Illinois C&I RCEs prior to resolving the Illinois AG's claim (to the extent the court were to even grant the AG's sought relief related to operating authority)

ADVERTISEMENT
NEW Jobs on RetailEnergyJobs.com:
• NEW! -- Energy Pricing Analyst -- Retail Supplier
• NEW! -- Senior Account Operations Analyst -- Retail Supplier
• NEW! -- Energy Procurement Manager
• NEW! -- Natural Gas Retail Analyst -- Retail Supplier -- Houston
• NEW! -- Associate Director of Market Strategy -- New York/Anywhere
• NEW! -- Energy Risk Professional -- Retail Supplier -- Houston
• NEW! -- Energy Customer Support Specialist -- Retail Supplier -- Houston
• NEW! -- Business Development Account Executive - Indirect Broker Sales -- Retail Supplier -- Houston
• NEW! -- Customer Engagement Manager -- Retail Supplier -- Houston
• NEW! -- Energy Customer Service Specialist
• NEW! -- Energy Sales Executive
• NEW! -- Senior Energy Intelligence Analyst
• NEW! -- Energy Advisor

HOME

Copyright 2010-21 Energy Choice Matters.  If you wish to share this story, please email or post the website link; unauthorized copying, retransmission, or republication prohibited.